Will 2021 Housing Market Trends Continue Next Year?
2021 was a record-breaking year for home prices and rent, and experts say it might be a while before we see the drop.
2021 was a record breaking year for the housing market.
Home prices soared as sellers tried to cash in on the demand from potential buyers, and tenants also saw big increases in rent.
"We wanted to get a house badly and there were some tough points trying to find it," Chad Sankow, recent home buyer, said. "Homes we were looking at sold for almost half the price the last time they sold."
Couple the stress with finding a perfect home and the booming housing market and the search intensifies even more.
"We were worried that if the prices were gonna keep rising, if we waited any longer, would we be able to afford in the future," Charisse Sankow said.
This was the feeling for Chad and Charisse Sankow and many other prospective buyers trying to snag a home in 2021 - one of the hottest markets in U.S. history, according to online real estate marketplace Zillow.
"We did feel kind of a sense of urgency or else maybe we wouldn't be able to secure a home that fit our needs," Charisse said.
What goes up must come down, but that's not the case just yet with the housing market. Experts says while 2022 won't be as hot as 2021, house prices will continue their upward trend but more so due to supply constraints.
Zillow's economic research team predicts an 11% home value growth in 2022.
Kevin Riordan, real estate expert and clinical specialist of Accounting and Finance with Montclair State University, says the demand for housing plus inflation also led to higher rental costs in 2021. He says that could continue in the new year as well.
"We still have supply chain, inflationary type costs pushing new construction pricing up," Riordan said. "As housing prices increase, people's ability to buy that house diminishes because you need certain income levels and down payment requirements, so that forces a cohort of people back into the rental market."
So when will prices start dropping again? Riordan says that depends on supply.
"If there's more supply, there could be more downward pressure on pricing that way," Riordan said.
That's especially true in the rental market.
If you're looking to buy, Riordan says it still may be tough - but pay close attention to listings in your area and the time of year.
"There are less homes available during this time period, say October through February," Riordan said.
If you're putting your search on pause, Riordan suggests looking at multi-family homes as another option to consider.
"Then you can live in the house possibly and rent part of it also so it helps subsidize the cost that's required for you to own it," Riordan said.
Whichever route you decide, Chad and Charisse say don't give up.
"Having a really good real estate agent is probably the key," Charisse said. "If that one doesn't work out, it wasn't meant to be your home but we'll find one."
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